SEC. 202. MEDICARE INTEGRITY PROGRAM.
Title[ Title II\Subtitle A Contents
(a) Establishment of Medicare Integrity Program.--Title XVIII is
amended by adding at the end the following new section:
``medicare integrity program
``Sec. 1893. (a) Establishment <<NOTE: 42 USC 1395ddd.>> of
Program.--There is hereby established the Medicare Integrity Program (in
this section referred to as the `Program') under which the Secretary
shall promote the integrity of the Medicare program by entering into
contracts in accordance with this section with eligible entities to
carry out the activities described in subsection (b).
``(b) Activities Described.--The activities described in this
subsection are as follows:
``(1) Review of activities of providers of services or other
individuals and entities furnishing items and services for which
payment may be made under this title (including skilled nursing
facilities and home health agencies), including medical and
utilization review and fraud review (employing similar
standards, processes, and technologies used by private health
plans, including equipment and software technologies which
surpass the capability of the equipment and technologies used in
the review of claims under this title as of the date of the
enactment of this section).
``(2) Audit of cost reports.
``(3) Determinations as to whether payment should not be, or
should not have been, made under this title by reason of section
1862(b), and recovery of payments that should not have been
made.
``(4) Education of providers of services, beneficiaries, and
other persons with respect to payment integrity and benefit
quality assurance issues.
``(5) Developing (and periodically updating) a list of items
of durable medical equipment in accordance with section
1834(a)(15) which are subject to prior authorization under such
section.
``(c) Eligibility of Entities.--An entity is eligible to enter into
a contract under the Program to carry out any of the activities
described in subsection (b) if--
``(1) the entity has demonstrated capability to carry out
such activities;
``(2) in carrying out such activities, the entity agrees to
cooperate with the Inspector General of the Department of Health
and Human Services, the Attorney General, and other law
enforcement agencies, as appropriate, in the investigation and
deterrence of fraud and abuse in relation to this title and in
other cases arising out of such activities;
``(3) the entity complies with such conflict of interest
standards as are generally applicable to Federal acquisition and
procurement; and
``(4) the entity meets such other requirements as the
Secretary may impose.
In the case of the activity described in subsection (b)(5), an entity
shall be deemed to be eligible to enter into a contract under the
Program to carry out the activity if the entity is a carrier with a
contract in effect under section 1842.
``(d) Process <<NOTE: Regulations.>> for Entering Into Contracts.--
The Secretary shall enter into contracts under the Program in accordance
with such procedures as the Secretary shall by regulation establish,
except that such procedures shall include the following:
``(1) Procedures for identifying, evaluating, and resolving
organizational conflicts of interest that are generally
applicable to Federal acquisition and procurement.
``(2) Competitive procedures to be used--
``(A) when entering into new contracts under this
section;
``(B) when entering into contracts that may result
in the elimination of responsibilities of an individual
fiscal intermediary or carrier under section 202(b) of
the Health Insurance Portability and Accountability Act
of 1996; and
``(C) at any other time considered appropriate by
the Secretary,
except that the Secretary may continue to contract with entities
that are carrying out the activities described in this section
pursuant to agreements under section 1816 or contracts under
section 1842 in effect on the date of the enactment of this
section.
``(3) Procedures under which a contract under this section
may be renewed without regard to any provision of law requiring
competition if the contractor has met or exceeded the
performance requirements established in the current contract.
The Secretary may enter into such contracts without regard to final
rules having been promulgated.
``(e) Limitation <<NOTE: Regulations.>> on Contractor Liability.--
The Secretary shall by regulation provide for the limitation of a
contractor's liability for actions taken to carry out a contract under
the Program, and such regulation shall, to the extent the Secretary
finds appropriate, employ the same or comparable standards and other
substantive and procedural provisions as are contained in section
1157.''.
(b) Elimination of FI and Carrier Responsibility for Carrying Out
Activities Subject to Program.--
(1) Responsibilities of fiscal intermediaries under part
a.--Section 1816 (42 U.S.C. 1395h) is amended by adding at the
end the following new subsection:
``(l) No agency or organization may carry out (or receive payment
for carrying out) any activity pursuant to an agreement under this
section to the extent that the activity is carried out pursuant to a
contract under the Medicare Integrity Program under
section 1893.''.
(2) Responsibilities of carriers under part b.--Section
1842(c) (42 U.S.C. 1395u(c)) is amended by adding at the end the
following new paragraph:
``(6) No carrier may carry out (or receive payment for carrying out)
any activity pursuant to a contract under this subsection to the extent
that the activity is carried out pursuant to a contract under the
Medicare Integrity Program under section 1893. The previous sentence
shall not apply with respect to the activity described in section
1893(b)(5) (relating to prior authorization of certain items of durable
medical equipment under section 1834(a)(15)).''.
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